Contract packaging allows manufacturers to outsource the packaging of goods and entrust them to a specialized company. The Contract Packager packages the products in accordance with previously agreed agreements. This division of labor makes it possible to use resources efficiently. Some contract packagers also offer extensive services that go far beyond packaging.
What is contract packaging?
In today’s business world, there is a strong division of labor and specialization in many areas. In ContractPackaging, a company specializes in packaging goods that have been produced or imported by another company. Such contract packagers are also referred to as co-packagers or contract packers.
The possibilities offered by contract packaging depend on the packaging company and the agreement between the contract packer and the manufacturer. Some co-packagers offer labeling, packaging, kits and more.
What advantages can contract packaging have?
The division of labor between manufacturer and packer can offer several advantages. For example, the manufacturer does not need his own machines for the final packaging, but can delegate this task to the cooperating company in contract packaging. This allows producers to focus more on the manufacturing process.
The specialization of companies also makes it possible to use resources and know-how efficiently. In co-packaging, the manufacturer does not always have to plan and organize every single step – for example, to look for suppliers for suitable boxes.
In addition, Contract Packaging offers importers the option of having their goods repackaged. Many contract packers make it possible to compile seasonal or thematic sets or to package product packages for marketing purposes. Some co-packagers also offer a comprehensive logistics service.
Disadvantages of contract packaging?
In contract packaging, the manufacturing company hands over part of the process to an external service provider. Although this step can be beneficial, the producer also gives it some of the control. Trust between stakeholders is an important factor in this context.Inadequate collusion with the co-packager can lead to misunderstandings that may need to be corrected, which takes time and other resources. Whether the potential benefits of co-packaging can be implemented depends crucially on the reliability of the contract packer.
For some goods, special guidelines apply, for example for food for humans and animals, for pharmaceutical products, pharmaceuticals and cosmetic products. Depending on which goods are to be packed or repackaged, therefore, not every co-packager for a manufacturer in question – the packaging company must meet the appropriate requirements. High standards not only serve to comply with legal requirements, but also help maintain consumer confidence. For food and similar goods, too, contract packaging is possible if the contract packer has the necessary equipment.